1. Price: what the gap is actually paying for
A private seller usually asks less for the same car. They have no lot, no staff and no reconditioning bill to recover, so the number starts closer to what the car is worth to a person than to a business. A dealer's price carries more than the car: they've often fixed what was wrong, detailed it, pulled the history, and they'll handle the paperwork and financing for you. Neither price is wrong; they're buying different things, and this guide is about what sits in the gap. The board lists dealers and private sellers side by side, so you can see that gap on real cars.
2. Paperwork: who walks it to the Secretary of State
Buying from a dealer, the dealer is required to apply for your title and registration: you sign, they file it with the Secretary of State, and your plate comes along in the same stack. From a private seller, the job is yours and theirs: the seller signs the title over with the odometer reading recorded, and you take it to an SOS office to put it in your name. The SOS recommends going in together, and offers an online transfer when both of you have Michigan IDs and the car has a paper title. Either way there's a short window after the sale to get it done; the SOS site says how long.
On both sides, the plate belongs to the person, not the car: the seller keeps theirs and you transfer one you already own or buy new. And Michigan no-fault insurance has to be in place before you drive it on your own plate.
3. Sales tax, and the trade-in credit only a dealer can give
Michigan taxes a vehicle purchase at 6% either way. A dealer collects it in the deal; in a private sale you pay it at the SOS when you transfer the title, figured on the price or the vehicle's retail value, whichever is higher. The real difference is the trade-in: trade a car at a dealer and Michigan gives you a credit on the trade-in value, so you're taxed on the difference, with a cap set by statute that has been rising yearly. There's no version of that in a private sale; you sell your old car separately and pay tax on the full price of the one you buy. If you've got a car to move, Trade it in, or sell it yourself? walks through that math.
4. Financing: who can lend against the car
A dealer can arrange financing on the spot, building the deal around a payment you can live with; that's most of why people who need a loan end up on a lot. A private seller can't lend you anything, so you bring your own, usually from a bank or credit union, and it's easier to have that approved before you go looking than after. One wrinkle on the private side: if the seller still owes on the car, the lender holds the title, and that loan has to be paid off before it can be signed over to you. Agree with the seller on exactly how that happens before any money moves.
5. “As-is” lives on both sides
Here's the part people get backwards: a used car is as-is from a private seller, and it's usually as-is from a dealer too, unless a written warranty says otherwise. The difference is that a dealer has to tell you in writing. Federal rules put a Buyer's Guide sticker in the window of every used car on a dealer's lot; it either says "As Is — No Dealer Warranty" or spells out what the dealer's warranty covers, and it becomes part of your contract. A private seller owes you no sticker, and "it runs great" said out loud is not a warranty. On either side, any coverage that does exist, factory warranty with time left or a service contract, is worth confirming in writing before you pay.
6. Inspection: Michigan won't do it for you
Michigan has no state safety inspection and no emissions test for passenger cars, so nobody official has looked at the car before you. A dealer's reconditioning is real work, but it's the seller's inspection, not yours. A pre-purchase inspection at an independent shop is the equalizer, and a dealer who won't allow one has told you the same thing a private seller who won't allow one has. Run the test-drive checklist first, ask for the VIN and a history report, and let the shop settle what you can't.
7. Recourse: who stands behind the deal
A Michigan dealer is licensed by the Secretary of State, which takes complaints about vehicle sales and can investigate and discipline a dealership. That isn't a warranty, but it's a door to knock on if the paperwork never shows up or the car wasn't what was promised. A private sale has no regulator behind it; if the car wasn't what you were told, your options are the ones any two private parties have, and they're slow. That's why the inspection matters more on that side, not less. Michigan's Lemon Law is a new-vehicle law that reaches a used car only narrowly, while the manufacturer's warranty still applies, so don't count on it from either seller; the Attorney General's consumer protection office explains where it does. Can't tell which side wins on a specific car? Ask; the marketplace lists both, and we don't have a side.